Opposition to PNM replacement proposal for sources of electricity remains high as decision looms

The Public Service Company of New Mexico’s power replacement plan is still up in the air, and it doesn’t look like anything will be decided before April.

The investor-owned utility wants public regulation commissioners to approve its proposal to acquire another 132 megawatts of coal-generated electricity and to bring nuclear power, which is currently bought on the open market from the Palo Verde plant in Arizona, into its New Mexico rate base.

Environmental groups support PNM's plan to shutter two coal stacks at the San Juan Generating Station as a way to comply with the Environmental Protection Agency's Regional Haze Program, but they oppose PNM's future reliance on fossil fuels and nuclear energy.

Ashley Schannauer, an independent hearing examiner for the state Public Regulation Commission, has been considering stakeholder briefs submitted to him on Feb. 16 at the conclusion of three weeks of public hearings. The parties were scheduled to file responses to those briefs this week. After Schannauer issues his recommendation, commissioners have the power to make the final decision. No date is set for that vote.

In the meantime, PNM executives claim that their proposal meets legal requirements and is the most reliable and cost efficient for consumers, but renewable energy groups and other stakeholders disagree and have withdrawn their support for a stipulated agreement between the attorney general’s staff and utility.

Attorneys who wrote PNM’s brief in support of the plan contend that employees investigated a “myriad set of circumstances” and renewable alternatives, but that they “didn’t adequately” meet risk or reliability requirements.

Mariel Nanasi, the executive director for New Energy Economy, a nonprofit renewable energy advocacy group who led the charge against PNM’s proposed power plan, says the proposal included more than $1 billion in mathematical calculation errors.

She thinks the real risk is PNM’s reliance on coal and nuclear-generated power.

“PNM wants PRC commissioners to have ratepayers invest in a plant only operates at 75 percent reliability,” Nanasi tells SFR. “Their predetermined plan, which simply taps their own resources, has nothing to do with the genuine stakeholder process that is required by state law and regulatory process.”

Nanasi tells SFR, in her view, the current proposal “shifts the burden of PNM’s toxic assets from shareholders to ratepayers.”

Before Schannauer finalizes his reports, Nanasi wants him to strike testimony from PRC Bureau Chief Brunno Carrara “because he illegally owned stock in PNM at the same he was offering agency staff support for the plan.”

Nan Winter, an attorney representing the Albuquerque Bernalillo County Water Utility District, writes in a brief that the district withdrew its original support for the stipulated agreement after discovering significant changes and “mistakes.”

“Unfortunately, in this case, should the stipulating parties prevail in getting Commission approval of the Stipulation, all New Mexico ratepayers will bear the risks of these changed circumstances,” writes Winter, urging the commission to reject the plan.

If the PNM’s plan is rejected, it's not clear what the next move would be. Gerard Ortiz, the company's vice president of regulatory affairs, told SFR late last year that rejection or modification of the proposal would lead PNM to " evaluate our options in light of the final order."

Western Resources, Renewable Energy Industries Association, and New Mexico Independent Power Producers have backed out of the Oct. 14, 2014 stipulated agreement, however, it looks like PNM can still count on support from the New Mexico Attorney General’s office, New Mexico Industrial Energy Consumers and PRC’s staff.

The New Mexico Industrial Energy Consumers group includes Intel. The semiconductor company is the only company in PNM's 30-megawatt rate classification category. At the same time PNM has asked commissioners to consider raising consumer rates by 16 percent,Intel's own rates could be decreased by close to 1.5 percent.

PNM declined multiple requests from SFR to comment on Intel's rate reduction or to answer questions about whether it's tied to Intel's support of the utility's power replacement plan.